Core Points - Big Lots will reintroduce 'Black Friday Fridays' in 2024, offering special one-day deals every Friday with discounts up to 50% off across various product categories from now until December 6 [1][2] - The event will commence on September 13, featuring a one-day 50% discount on all Halloween décor, marking the start of the sales event [1][3] Group 1 - The CEO of Big Lots, Bruce Thorn, emphasized the importance of helping customers manage their budgets by providing early access to significant Black Friday-level deals [3] - Big Lots has acquired overstock from a national party supply retailer, valued at $11 million, which will contribute to the largest Halloween closeout in the company's history, with discounts of 50-70% on new Halloween items [3] - Weekly deals will be announced every Thursday morning, covering various product categories, including holiday gifts and seasonal décor, all available for one day only at up to 50% off [4] Group 2 - On the launch day, September 13, Big Lots Foundation will match in-store donations to The Kids Mental Health Foundation up to $50,000, incentivizing donations with a coupon for $5 off future purchases [5] - Big Lots positions itself as a leading closeout retailer focused on delivering extreme value, with a mission to help customers "Live BIG and Save LOTS" through various sourcing strategies [6]

Three days after Big Lots announced a Chapter 11 restructuring and acquisition by Nexus Capital Management, Big Lots President and CEO Bruce Thorn offered an overview of the company's performance and strategic direction during the second-quarter earnings call Thursday (Sept. 12). Second-quarter comparable sales fell 14.6% in a "very challenging environment," Thorn explained, "in which our core lower-income customer remains under significant pressure and has limited capacity for higher ticket discretionary p ...

Financial Performance - Net sales decreased by $92.8 million, or 8.1%, in Q2 2024 compared to Q2 2023[121] - Comparable sales for stores open at least fifteen months, plus e-commerce net sales, decreased by $57.5 million, or 5.3%[121] - Year-to-date net sales decreased by $207.3 million, or 9.2%, to $2,055.7 million in 2024, with a 7.6% decline in comparable store sales contributing to this decrease[138] - Net sales decreased by $92.8 million, or 8.1%, to $1,046.6 million in Q2 2024 compared to Q2 2023, primarily due to a 5.3% decrease in comparable store sales[127] Gross Margin and Expenses - Gross margin rate increased by 190 basis points to 34.9% of net sales, despite a decrease in gross margin dollars by $10.7 million[121] - Gross margin dollars decreased by $10.7 million, or 2.8%, to $365.2 million in Q2 2024, while gross margin as a percentage of net sales increased by 190 basis points to 34.9%[131] - Selling and administrative expenses increased by $93.6 million to $553.7 million, representing 52.9% of net sales, an increase of 1,250 basis points[121] - Selling and administrative expenses increased by $93.6 million, or 20.3%, to $553.7 million in Q2 2024, with expenses as a percentage of net sales rising to 52.9%[132][133] - Selling and administrative expenses for year-to-date 2024 were $1,086.7 million, a slight increase of $5.8 million from $1,080.9 million in year-to-date 2023, primarily due to store asset impairment charges of $84.5 million[143] - As a percentage of net sales, selling and administrative expenses increased by 510 basis points to 52.9% for year-to-date 2024 compared to 47.8% for year-to-date 2023[144] Debt and Financing - Long-term debt decreased from $493.2 million in Q2 2023 to $0.0 million in Q2 2024 due to the Chapter 11 filing[121] - Total debt increased by $77.8 million from $504.4 million in Q2 2023 to $582.2 million in Q2 2024[121] - The total debt of approximately $556.1 million became due and payable due to the Chapter 11 filing, resulting in all outstanding indebtedness being classified as current debt[153][154] - The company has secured approximately $550 million in debtor-in-possession financing through the DIP ABL Facility, which will be used to refinance existing commitments under the 2022 Credit Agreement[169] - The 2024 Term Loan provides for a committed amount of up to $200 million, with an initial drawdown of $50.0 million[163] - The 2024 Term Loan has an interest rate of 14.6% as of August 3, 2024, with mandatory prepayments required under certain conditions[167] - As of August 3, 2024, the company had $459.3 million in borrowings under the 2022 Credit Agreement and $115.0 million under the 2024 Term Loan, all classified as current due to Chapter 11 filings[184] Operational Changes - The company plans to close up to 315 stores in 2024, including 296 closures announced for Q3 2024[123] - The company expects to manage operations as a "debtor-in-possession" under the Bankruptcy Court's jurisdiction, allowing continued operation but restricting transactions outside the ordinary course of business[152] - The company anticipates sequential improvement in underlying comparable sales trends and gross margin rate, although it is not providing earnings guidance for the second half of 2024[150] Tax and Interest - The effective income tax rate for Q2 2024 was (0.2%), compared to (87.5%) in Q2 2023, due to a full valuation allowance on deferred assets[137] - The effective income tax rate for year-to-date 2024 was (0.1%), a significant change from (13.0%) in year-to-date 2023, due to a full valuation allowance on deferred assets[149] - Interest expense rose to $16.3 million in Q2 2024 from $11.2 million in Q2 2023, driven by higher average borrowings of $721.3 million[136] - Interest expense increased to $28.3 million in year-to-date 2024 from $20.3 million in year-to-date 2023, driven by higher average borrowings of $689.8 million compared to $606.2 million in the prior year[148] Cash Flow - Cash used in operating activities increased by $14.0 million to $164.6 million in year-to-date 2024 compared to $150.6 million in year-to-date 2023[179] - Cash used in investing activities rose by $4.7 million to $25.1 million in year-to-date 2024, driven by decreased proceeds from the sale of property and equipment[180] - Cash provided by financing activities increased by $24.5 million to $196.8 million in year-to-date 2024, attributed to net proceeds from litigation and other financing arrangements[181] - The company paid approximately $0.2 million in dividends in year-to-date 2024, a significant decrease from $9.7 million in year-to-date 2023 due to the suspension of quarterly cash dividends[177] Inventory and Product Performance - Inventory decreased by 14.8%, or $145.9 million, from $983.2 million at the end of Q2 2023 to $837.3 million at the end of Q2 2024[121] - The Furniture category showed a sequential improvement in year-to-date 2024, driven by Broyhill® branded products returning to normal in-stock levels[140] - The Food and Consumables categories performed relatively better than home products, despite experiencing decreased comps and net sales[141] - The company plans to increase Bargain and Extreme Bargain assortments in the candy and snacks departments throughout the remainder of 2024[130] Depreciation and Estimates - Depreciation expense decreased by $13.1 million to $64.8 million in year-to-date 2024, compared to $77.9 million in year-to-date 2023, primarily due to the absence of FDC related depreciation[145] - The estimates and assumptions used in the financial reporting process have a high degree of inherent uncertainty, which could materially affect the financial condition and results of operations if different estimates were applied[183]

And CEO Tom Shea from the newly public OneStream joins us to talk about what the company can do for customers. In this podcast, Motley Fool analyst Jason Moser and host Dylan Lewis discuss: Apple's "Glowtime" product event, what to expect for the iPhone line and the company's AI ambitions. (Note: We recorded this before the event. How good were our predictions?) The latest antitrust case against Google and why Meta and Apple should probably be paying attention. Big Lots' bankruptcy filing and why the discou ...

Core Insights - Big Lots is undergoing a Chapter 11 restructuring and preparing for acquisition by Nexus Capital Management, highlighting significant issues in its business model and the economic pressures it faces [1][9] Business Model Challenges - The traditional brick-and-mortar model of Big Lots, which relies heavily on closeout merchandise, has become less appealing as consumers increasingly seek convenience and variety [3][4] - The rise of eCommerce and changing consumer preferences have left Big Lots struggling to keep pace, compounded by a limited online presence [3][4] Competitive Landscape - Big Lots faces fierce competition from discount retailers like Dollar General and Dollar Tree, as well as online marketplaces such as Amazon, which offer lower prices and a broader selection [4][5] - The economic impact of the COVID-19 pandemic has further strained Big Lots, leading to declining sales, store closures, and financial difficulties [5][9] Consumer Behavior Trends - A PYMNTS Intelligence study indicates that approximately 40% of consumers identify as Click-and-Mortar shoppers, preferring a blend of digital and physical shopping experiences [5] - The trend of consumers reducing discretionary spending has been noted, with 60% of shoppers cutting back on nonessential purchases [8][9] Inventory and Product Focus - Big Lots has a heavy reliance on discretionary categories like furniture and home decor, which have seen a slowdown in consumer spending [10] - The company has been slow to invest in the grocery category, facing stiff competition from retailers like Aldi and Walmart, which have aggressively cut prices [11] Future Outlook - The future of Big Lots remains uncertain, but a potential acquisition by a private equity firm could provide necessary resources and expertise for recovery [5] - Big Lots plans to assess its store footprint and may close additional locations as part of its restructuring process [12]

Core Viewpoint - Big Lots has filed for Chapter 11 bankruptcy protection due to declining consumer spending and soft sales, planning to sell its assets and ongoing operations to Nexus Capital Management [1][2]. Group 1: Financial Performance - High inflation and interest rates have negatively impacted Big Lots' business, leading to a significant pullback in consumer purchases of home and seasonal products, which are crucial for revenue [2]. - Sales at stores open for at least a year have declined for nine consecutive quarters, indicating ongoing struggles in retail performance [2]. Group 2: Strategic Decisions - The board of Big Lots determined that selling to Nexus Capital was the best strategic move despite some improvement in performance [3]. - The company will continue operations during the court-supervised sale process but plans to close some stores without specifying details [4][5]. Group 3: Financing and Auction Process - Big Lots has secured commitments for $707.5 million in financing, including $35 million in new financing from current lenders, to support operations during the sale process [8]. - Nexus Capital will act as a "stalking horse" bidder in a court-supervised auction, with the sale subject to higher bids [6]. Group 4: Market Position and Challenges - Big Lots operates in a highly competitive market where other value retailers are outperforming in delivering low prices and compelling bargains [7]. - The company has received a notice from the New York Stock Exchange due to its stock price falling below $1 for 30 consecutive trading days, with shares dropping 40% to 30 cents in premarket trading [9].

Company Overview - Big Lots Inc. is preparing to file for bankruptcy and plans to sell its chain of stores through a court-supervised process due to high interest rates and a sluggish housing market affecting demand for its products [1][6] - The company operates over 1,300 stores across 48 states and generated approximately $4.7 billion in revenue in fiscal 2023, but has seen a consistent decline in sales post-pandemic [3][6] Bankruptcy Details - Big Lots has agreed to sell its business to private equity firm Nexus Capital Management for about $760 million, which includes $2.5 million in cash along with its remaining debt and liabilities [2] - As part of the bankruptcy process, Big Lots will close nearly 300 stores to improve its balance sheet and reduce costs [4] Management Statements - CEO Bruce Thorn stated that the actions taken will allow the company to move forward with new owners who believe in its business and provide financial stability [5] - Nexus Capital's managing director expressed confidence in Big Lots' potential for recovery and aims to restore the brand's status as a leading extreme value retailer [5] Market Challenges - Big Lots has faced challenges due to macroeconomic factors such as high inflation and interest rates, which have led its core customers to reduce discretionary spending [7] - The company operates in a highly competitive market, struggling to differentiate itself from other discount retailers like Wayfair, Walmart, and TJX Cos.' Home Goods [7][8] Consumer Perception - Analysts have noted that Big Lots may not always offer the best value for money, with many items available at lower prices from competitors [8] - The shopping experience has been criticized for being unsatisfactory due to a jumbled assortment of products, which detracts from consumer appeal compared to other discount retailers [9]

KEY TAKEAWAYS Big Lots filed for Chapter 11 bankruptcy protections and agreed to sell itself to an affiliate of privateequity firm Nexus Capital Management. The filing by the home goods and furniture retailer follows extended sales declines and several quarters of losses at the discount retailer. The Ohio-based firm said Nexus will serve as the "stalking horse bidder" in a court-supervised auction process, and that the deal will close in the fourth quarter if it doesn't get better offers. Big Lots (BIG) fil ...

Discount retailer Big Lots has declared bankruptcy and sold itself to an investment firm. The company announced Monday (Sept. 9) that it had entered voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of Delaware, to facilitate its sale to an affiliate of Nexus Capital Management. The retailer also indicated it will close some locations. "The actions we are taking today will enable us to move forward with new owners who believe in our business and provide financial stability, whil ...

About three months after Big Lots noted "substantial doubt about the Company's ability to continue" in a U.S. Securities & Exchange Commission (SEC) filing, the company said on Monday it has secured $707.5 million to support its operations and sell its business to private equity firm Nexus Capital. This comes as the company has initiated bankruptcy proceedings under Chapter 11. Big Lots listed its assets and liabilities in the range of $1 billion to $10 billion, according to a filing with bankruptcy court i ...